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Plastic packaging tax starting in April 2022

Emily Antcliffe

Director, Indirect Tax, ‎HM Revenue & Customs

Plastic waste is a pressing issue both here and abroad. Often, it does not decompose and can last centuries in landfill, or else ends up littering the streets or polluting the natural environment. Every year over 2 million tonnes of plastic packaging are used in the UK alone.[1]

The vast majority of plastic packaging originates from new plastic as it’s often cheaper to use than recycled plastic.

To combat this pressing issue, a new plastic packaging tax is being introduced in the UK. This will increase the demand for recycled plastic, stimulate increased levels of recycling and collection of plastic waste, thus diverting plastic waste from landfill. The tax will complement other government initiatives aimed at revolutionising the way the UK deals with its waste.

The tax will come into force in April 2022 and apply to businesses that manufacture or import plastic packaging containing less than 30% recycled plastic, charged at £200/tonne of such packaging. This will provide a clear economic incentive to use recycled plastic in the production of plastic packaging.

A new plastic packaging tax is being introduced in the UK; this will increase the demand for recycled plastic and stimulate increased levels of recycling.

Following representations from interested parties, the government announced at the Budget in March that plastic packaging, which has been filled before being imported into the UK (i.e. bottles which are filled with liquid), will be within the scope of the tax.

This will further incentivise a wide range of industries to consider the materials they use to make their packaging, including retail, construction and manufacturing. An annual threshold for businesses handling less than 10 tonnes of plastic packaging will also prevent small businesses from facing excessive administrative burdens.

Earlier this year, HMRC consulted on the detailed design and implementation of the tax. The consultation included questions on potential exemptions, the persons liable, and the evidential requirements to prove the recycled plastic content. We will use the information gathered through the consultation to refine the design of the tax and continue working with industry and interested groups ahead of the launch in April 2022.

The Plastic Packaging Tax will not only transform the way that the UK deals with waste, but also generate carbon savings. The government estimates it will increase the use of recycled plastic in packaging by 40% – equal to carbon savings of nearly 200,000 tonnes.

[1] ‘The UK Plastics Industry: A Strategic Vision for Growth,’ British Plastics Federation, 2016

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